SMBs to Spend a Healthy Amount On Local Advertising In 2013

Ad Projections

January 2013 -- According to “2013 Local Advertising Outlook,” a report from Borrell & Associates, local ad spend will grow 8.2%, from $88.9 billion in 2012 to $96.2 billion in 2013.

One area expected to see a large uptick is the amount of marketing dollars small and medium size businesses (SMBs) plan spend to on local online media. Borrell predicts local online ad spending will grow from $18.7 billion last year to $24.5 billion in 2013, comprising a quarter of all local advertising. This represents a 31% increase over 2012 -- this on top of the 20% growth local online advertising experienced in 2012.

Additional marketing mix findings from the survey of 1,756 small and mid-sized businesses:
 

• Some 54% of respondents said they will spend the same on total advertising this year as 2012, only 20% will spend more and 16% will spend less. Gordon Borrell states, “This indicates that the growth in online advertising might come from newcomers and high-rollers.”

• Examining overall media purchased in 2012, local newspapers advertising held the top spot at 64%, followed by online ads (62%), ads in local publications (54%), and direct mail (45%).

2012 SMB Ad Spend:

Source: Borrell & Associates, Local SMB Advertisers – 2013 Ad Spending Preview

• In 2013, online media will be tops in terms of local ad share, beating out newspapers in all but four U.S. markets.

• Top areas of spending increases for SMBs this year are online (+38%), mobile (+25%) and direct mail (+18%).
  
   

2013 SMB Ad Budgets:

Source: Borrell & Associates, Local SMB Advertisers – 2013 Ad Spending Preview

• Two media categories are predicted to see declines: local radio is predicted to drop 5.9%, and local magazines, shoppers and alternative newsweeklies will decrease by 2.5%.

• In 2012, one in four (24%) respondents employed a mobile ad campaign, while 79% did not. For 2013, 37% state they are “somewhat" or "very likely” to incorporate mobile advertising into their marketing efforts.

• Eight out of ten (79%) SMB respondents report having a social media presence.

• Facebook is the top choice for 2013 online spending with 28% of respondents state they will place ads directly with Facebook, followed by 25% who will purchase run-of-site banner ads.

• Some 42% of respondents have no plans to purchase online advertising.

 
About: The 2013 forecast is based on an online survey of 1,756 small and midsize businesses, conducted between December 10 – January 3, 2013. This sample size has a margin of error of 2.5% at a 95% confidence level.
 
Sources: SMBNow, Survey Says SMB Ad Spending To Rebound In 2013, January 9, 2013 and Borrell & Associates, Local SMB Advertisers – 2013 Ad Spending Preview, accessed January 14, 2013.